In the Wake of Record Growth, Fidelity Launches New Enhancements to
Workplace Managed Account Platform

March 30, 2017 08:30 AM Eastern Daylight Time

BOSTON--(EON: Enhanced Online News)--With the growing popularity of “do it for me” strategies among 401(k)
savers, Fidelity Investments is expanding its offering for people who
want professional help managing their retirement savings.

“Do it for me” investment solutions, including target date funds and
managed accounts, are increasingly popular, and Fidelity’s managed
account platform recently surpassed one million1 accounts,
with nearly 300,000 of them in workplace savings plans like 401(k)s and
403(b)s. However, as the number of employees using these options
increases, employers are demanding more flexibility and choice to give
their employees the professionally managed strategy that best fits their
retirement savings needs.

In response to this demand, Fidelity has released two enhancements:

Smart QDIASM. Most employees who are
automatically enrolled in their 401(k) are defaulted into an
age-appropriate target date fund.2 However, employees have
different investing needs, and with Fidelity’s Smart QDIA3,
employers can make use of two defaults — a target date fund and
Fidelity’s managed account service, Fidelity® Portfolio Advisory
Service at Work (PAS-W) — to help keep employees on a path to
financial security. Employers can customize and set criteria to
determine each employee’s default investment based on factors
including age, account balance and other financial indicators.

Index-based managed account. Fidelity is expanding the managed
account offering to include an index-based managed account, which will
track to a market benchmark using index funds from the employer’s
401(k) lineup. The Index-based managed account complements Fidelity’s
Core offering and gives employers the option to choose the solution
that best aligns with their investment philosophy and plan objectives.

“As more employees view their retirement savings as part of their
overall financial wellness, employers need flexible solutions that can
help their employees’ investment needs,” said Sangeeta Moorjani, Head of
Fidelity’s Workplace Managed Accounts business. “We’re pleased to
enhance our offering while continuing to provide clients with a seamless
managed account service to meet the evolving demands of workplace
investors.”

Fidelity experiences record growth for PAS-W in 2016These
enhancements come as Fidelity’s managed account offering is experiencing
record growth4.

Fidelity added more than 750 plan sponsors to its PAS-W business for a
total of nearly 4,500 clients at the end of 2016, up 16 percent over
the prior year.

Enrolled participants in the service grew 26 percent in 2016 to
300,000, which is five times the number of enrolled participants from
five years ago.

Assets under management grew 41 percent to $20.4 billion, nearly
triple the $7.3 billion reported at the end of 2013.

Fidelity’s overall managed account business, including both Portfolio
Advisory Services and Portfolio Advisory Service at Work, grew
to $243 billion in 2016, an increase of 35 percent from the end of
2013.

While most of Fidelity’s business represents organizations that added a
managed account to their benefits platform for the first time, many
clients were in a competing managed account and replaced it with
Fidelity’s offering. In 2016, clients representing 90,000 employees and
nearly $10 billion in assets switched from a competing managed account
to Fidelity’s PAS-W, and another 135,000 employees and $13 billion in
assets are projected to move to PAS-W in early 2017.

“An increasing number of employers are recognizing that a managed
account is another great option for people who need help managing their
own retirement savings or staying on track as they transition into and
live in retirement ,” added Moorjani. “Fidelity believes in guiding
participants to the right solution that meets their retirement savings
needs, whether that is a target date fund or a managed account.”

The integration of PAS-W offers employees a consistent cross-channel
experience when saving, planning and investing for retirement, whether
they choose to do it themselves or enroll in a professionally managed
account. For more information on PAS-W, plan sponsors or consultants can
contact their Fidelity representative.

About Fidelity Investments

Fidelity’s mission is to inspire better futures and deliver better
outcomes for the customers and businesses we serve. With assets under
administration of $6.0 trillion, including managed assets of $2.2
trillion and Freedom Fund assets of $202 billion as of February 28,
2017, we focus on meeting the unique needs of a diverse set of
customers: helping more than 26 million people invest their own life
savings, nearly 23,000 businesses manage employee benefit programs, as
well as providing nearly 12,500 financial advisory firms with investment
and technology solutions to invest their own clients’ money. Privately
held for nearly 70 years, Fidelity employs 45,000 associates who are
focused on the long-term success of our customers. For more information
about Fidelity Investments, visit https://www.fidelity.com/about.

Keep in mind that investing involves risk. The value of your investment
will fluctuate over time and you may gain or lose money.

Diversification/asset allocation does not ensure a profit or guarantee
against loss.

Fidelity® Portfolio Advisory Service at Work is a service of
Strategic Advisers, Inc., a registered investment adviser and a Fidelity
Investments company. This service provides discretionary money
management for a fee.

1 Fidelity data, as of February 2017.2 Based
on analysis based on 22,100 corporate defined contribution plans and
14.5 million participants, as of December 31, 2016. These figures
include the advisor-sold market, but exclude the tax-exempt market.
Excluded from the behavioral statistics are non-qualified defined
contribution plans and plans for Fidelity’s own employees.3
Qualified Default Investment Alternatives. Based on the Pension
Protection Act of 2006, an investment qualifying as a QDIA is
appropriate as a single investment capable of meeting a worker’s
long-term retirement savings needs.4 Based on Fidelity
internal data, as of December 31, 2016.